Hasbro
HAS
$93.32
+0.89%
Hasbro, Inc. is a branded play and entertainment company that designs, manufactures, and markets toys, games, and licensed consumer products worldwide, spanning action figures, board games, digital gaming, and television/film content built on a portfolio that includes Transformers, Peppa Pig, Dungeons & Dragons, and Magic: The Gathering. Unlike pure toy manufacturers, Hasbro operates as a hybrid platform company, pairing physical consumer products with a high-margin digital and licensing engine through its Wizards of the Coast segment, which now represents the majority of revenue and profit. The current investor narrative centers on Hasbro's transformation into a digital-first gaming and licensing business, with Wizards of the Coast and Digital Gaming generating roughly $664 million in quarterly revenue versus $463 million from Consumer Products, while management has divested non-core entertainment assets to sharpen focus. Recent attention has been dominated by strong Q2 2026 results, including 16.2% year-over-year revenue growth, alongside the abrupt departure of Wizards of the Coast President John Hight, which has raised questions about leadership continuity in the company's most important growth engine. Analysts remain broadly constructive, with a strong buy consensus and a $109.50 average target, though the stock's recent pullback and elevated leverage keep the debate balanced between turnaround execution and balance-sheet risk.…
HAS
Hasbro
$93.32
Related headlines
Investment Opinion: Should I buy HAS Today?
The synthesized recommendation is Buy, with a one-sentence thesis that Hasbro's successful transformation into a digital-first gaming and licensing company, trading at a discounted forward PE of 13.75x, offers an attractive risk/reward for investors willing to tolerate near-term leverage and execution risks. The analyst consensus of strong buy (mean 1.47) and average target price of $109.50 imply 22.3% upside, anchoring the bullish view. This is supported by four key data points: 16.2% year-over-year revenue growth in Q2 2026, gross margin expansion to 76.1%, trailing free cash flow of $1.21 billion, and a PEG ratio of 0.197 that suggests undervaluation relative to growth. The forward PE of 13.75x is well below the broader market and near the low end of Hasbro's recent historical range, while the 3.38% dividend yield provides an income cushion. However, the extreme debt-to-equity of 6.32x and the recent leadership change at Wizards of the Coast are material risks that could invalidate the thesis. The rating would upgrade to a stronger Buy if debt-to-equity falls below 4x or if Wizards revenue growth accelerates above 20% YoY; it would downgrade to Hold if revenue growth decelerates below 10% or if free cash flow turns negative. Relative to its own history and the consumer cyclical sector, Hasbro appears undervalued on a forward earnings basis, but the premium on book value and the leverage discount warrant caution. Overall, the stock is fairly valued to slightly undervalued, with the potential for a re-rating if execution improves.
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HAS 12-Month Price Forecast
The forward-looking view is cautiously bullish, supported by Hasbro's successful pivot to digital gaming, which now drives the majority of revenue and profits, and a compelling valuation that appears to discount the leverage and execution risks. The 16.2% revenue growth and margin expansion to 76.1% demonstrate the underlying strength of the business, while the 22.3% upside to analyst targets suggests the market has not fully priced in the recovery. However, the extreme debt-to-equity of 6.32x and the recent departure of the Wizards president are significant overhangs that could cap upside until resolved. I would upgrade to high confidence if the company announces a credible permanent Wizards leader and shows progress on debt reduction; I would downgrade to neutral if revenue growth decelerates below 10% or if free cash flow deteriorates.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Hasbro's 12-month outlook, with a consensus price target around $110.62 and implied upside of +18.5% versus the current price.
Average Target
$110.62
0 analysts
Implied Upside
+18.5%
vs. current price
Analyst Count
—
covering this stock
Price Range
$90 - $120
Analyst target range
Hasbro is covered by 14 analysts with a consensus recommendation of strong buy and a recommendation mean of 1.47, where 1.0 represents a strong buy and 5.0 a sell, indicating a decidedly bullish institutional stance. The average target price is $109.50, which implies roughly 22.3% upside from the current price of $89.54, and the consensus EPS estimate of $7.73 for the forward period supports the 13.75x forward PE. The bullish tilt is corroborated by recent institutional ratings, which show a cluster of Buy and Overweight actions from firms including JP Morgan, B of A Securities, Jefferies, Citigroup, Roth Capital, BNP Paribas, and Argus Research between June and August 2026, with only Wells Fargo maintaining Equal Weight and DA Davidson staying Neutral. The target range spans $90.00 at the low end to $120.00 at the high end, a spread of $30.00, or about 33.5% of the current price, which signals meaningful disagreement about the pace and durability of the earnings recovery. The high target of $120.00 implies roughly 34% upside and likely assumes successful execution in Wizards of the Coast, continued digital gaming growth, multiple expansion toward the mid-teens, and debt reduction; the low target of $90.00 is essentially at the current price and prices in flat-to-modest growth, margin pressure, or disappointment around the leadership transition at Wizards. The wide spread, combined with the low beta of 0.466 and the short ratio of 5.35, suggests that while the consensus is bullish, the market is not fully convinced, leaving room for either a sharp re-rating if execution improves or a further de-rating if the digital growth story stalls.
Bulls vs Bears: HAS Investment Factors
The bull case currently has stronger evidence, driven by accelerating revenue growth (16.2% YoY), margin expansion (gross margin up to 76.1%), and a compelling forward valuation (13.75x PE) with 22.3% analyst upside. However, the bear case is not without merit, anchored by extreme leverage (debt-to-equity of 6.32x) and the recent departure of the Wizards president, which introduces execution risk at the most critical segment. The single most important tension is whether Hasbro can sustain its digital gaming momentum and translate it into consistent earnings growth to justify the forward estimates, while simultaneously deleveraging its balance sheet. If Wizards execution falters or leverage remains elevated, the stock could re-rate lower; if the digital pivot continues to deliver, the current discount to peers and history is likely to narrow.
Bullish
- Digital pivot drives margin expansion: Wizards of the Coast and Digital Gaming generated $663.8 million, or 58% of Q2 2026 revenue, up from a legacy mix dominated by lower-margin toys. This shift lifted gross margin to 76.1% in Q2 2026 from 74.6% a year ago and 68.2% in Q1 2026, while operating margin reached 22.2%.
- Revenue growth accelerating sharply: Q2 2026 revenue grew 16.19% year-over-year to $1.14 billion, following Q1 2026 growth of 12.7% and Q4 2025 growth of 31.3%. The multi-quarter trend shows consistent acceleration, with Q2 2026 net income of $160.9 million versus a loss of $855.8 million in the prior-year period.
- Attractive forward valuation: The forward PE of 13.75x is well below the broader market and near the low end of Hasbro's recent historical PE band of 11.6x to 21x. The PEG ratio of 0.197 implies the stock is inexpensive relative to expected growth, and the 3.38% dividend yield provides income support.
- Strong analyst consensus and upside: 14 analysts rate the stock a strong buy with a mean recommendation of 1.47, and the average target price of $109.50 implies 22.3% upside from the current $89.54. Recent institutional actions from JP Morgan, B of A, Jefferies, and Citigroup are predominantly Buy or Overweight.
Bearish
- Extreme leverage and balance-sheet risk: Debt-to-equity stands at 6.32x and total debt-to-capitalization is 83.5%, leaving little financial flexibility. The current ratio of 1.38 is adequate but thin, and the negative payout ratio of -1.22x raises questions about dividend sustainability despite the 3.38% yield.
- Leadership uncertainty at Wizards: The abrupt departure of Wizards of the Coast President John Hight in August 2026 introduces execution risk at the segment now generating 58% of revenue and the majority of profit. This leadership vacuum could slow the digital gaming roadmap, including D&D Beyond and Magic: The Gathering Arena initiatives.
- Trailing profitability distorted and weak: The trailing PE is negative at -36.0x due to the $1.04 billion impairment in Q2 2025, and trailing net margin is -6.86%. ROE is -59.87%, reflecting severe equity erosion, and the price-to-book ratio of 21.57x is exceptionally high, limiting book-value support.
- Near-term momentum has turned negative: The stock is down 4.24% over the past month and 0.69% over six months, underperforming SPY by 4.83 and 18.04 percentage points respectively. This divergence from the longer-term uptrend suggests a loss of near-term leadership and potential mean-reversion risk.
HAS Technical Analysis
Hasbro is in a broad recovery trend that has stalled into consolidation, with the stock up 19.1% over the past year but trading at $89.54, which is only about 53% of its 52-week range between a $69.50 low and a $106.98 high. That mid-range positioning signals neither momentum-driven overextension nor deep-value distress, but rather a market that has repriced the shares higher off the lows and is now waiting for the next fundamental catalyst. The 52-week high of $106.98 remains roughly 19.5% above the current price, while the 52-week low of $69.50 sits about 22.4% below, framing a wide but balanced risk envelope. Recent momentum has turned negative even as the longer-term trend stays positive: the stock is down 4.24% over the past month and down 0.69% over six months, yet up 11.72% over three months and 7.92% year-to-date. This divergence, with the 1-month decline conflicting with the 1-year gain, suggests a temporary pullback or mean-reversion phase rather than a full trend reversal, especially since the 3-month gain of 11.72% still outpaces the S&P 500's 3.34% over the same period. Relative strength tells the same story of fading near-term leadership: Hasbro trails SPY by 4.83 percentage points over one month and 18.04 points over six months, but leads by 8.38 points over three months and 4.11 points over one year. Key technical levels are defined by the $106.98 resistance and $69.50 support, with a breakout above resistance signaling renewed confidence in the digital gaming narrative and a breakdown below support likely reflecting disappointment in Wizards of the Coast execution or macro-driven consumer weakness. Volatility is unusually low relative to the market, with a beta of just 0.466, meaning the stock has historically moved less than half as much as SPY, which supports smaller position-sizing adjustments but also implies the stock may lag in sharp risk-on rallies. The maximum drawdown of -28.39% over the observed period underscores that even low-beta names can experience meaningful capital impairment during sector rotations.
Beta
0.44
0.44x market volatility
Max Drawdown
-28.4%
Largest decline past year
52-Week Range
$70-$107
Price range past year
Annual Return
+25.0%
Cumulative gain past year
| Period | HAS Return | S&P 500 |
|---|---|---|
| 1m | +4.9% | +2.1% |
| 3m | +18.2% | +3.1% |
| 6m | +1.7% | +14.6% |
| 1y | +25.0% | +16.0% |
| ytd | +12.5% | +14.2% |
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HAS Fundamental Analysis
Hasbro's revenue trajectory has inflected sharply positive, with Q2 2026 revenue of $1.14 billion representing 16.19% year-over-year growth off a depressed $980.8 million base in Q2 2025, which was distorted by a $1.04 billion non-cash impairment tied to the entertainment divestiture. The multi-quarter trend is constructive: revenue rose from $887.1 million in Q1 2025 to $1.00 billion in Q1 2026, and from $1.10 billion in Q4 2024 to $1.45 billion in Q4 2025, indicating both sequential and annual improvement. Segment data shows Wizards of the Coast and Digital Gaming contributing $663.8 million, or roughly 58% of the $1.14 billion quarterly total, versus $463 million from Consumer Products and just $12.8 million from the legacy Entertainment segment, confirming that digital gaming and licensing are now the primary growth engine. This mix shift matters because it carries structurally higher margins and less exposure to discretionary toy retail cycles, though the recent departure of the Wizards president introduces execution risk at precisely the segment investors are counting on most. Profitability has swung decisively positive after the prior-year impairment, with Q2 2026 net income of $160.9 million and a 14.1% net margin, compared to a net loss of $855.8 million in Q2 2025. Gross margin expanded to 76.1% in Q2 2026 from 74.6% in the year-ago quarter and 68.2% in Q1 2026, while operating margin reached 22.2%, reflecting a favorable mix toward digital and licensing revenue. The trailing twelve-month picture is still distorted by the 2025 impairment, leaving the trailing PE negative at -36.0x and net margin at -6.86%, but the forward PE of 13.75x and the quarterly profit run-rate suggest the underlying business is generating healthy earnings power. Balance-sheet risk is the clearest fundamental concern: debt-to-equity stands at 6.32x, total debt-to-capitalization is 83.5%, and the current ratio of 1.38 is adequate but not strong. Free cash flow remains robust at $1.21 billion on a trailing basis, with Q2 2026 free cash flow of $247.7 million and operating cash flow of $266.7 million, while cash on hand was $880.5 million. However, ROE of -59.87% reflects the impairment-driven equity erosion, and the dividend payout ratio of -1.22x signals that the current dividend is not covered by trailing earnings, though the 3.38% dividend yield remains a shareholder return lever that management has been reluctant to cut.
Quarterly Revenue
$1.1B
2026-06
Revenue YoY Growth
+16.2%
YoY Comparison
Gross Margin
76.1%
Latest Quarter
Free Cash Flow
$1.2B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is HAS Overvalued?
Because Hasbro's trailing net income is negative due to the 2025 impairment, the PE ratio is not meaningful at -36.0x, so the primary valuation metric is the forward PE of 13.75x, which reflects expected EPS of $7.73 and a normalized earnings base. The gap between the negative trailing PE and the positive forward PE is enormous and implies the market expects a full earnings recovery, with the forward multiple sitting well below the broader market and suggesting investors are pricing in either skepticism about the sustainability of the rebound or a discount for leverage and execution risk. On a price-to-sales basis, Hasbro trades at 2.47x, and its EV/EBITDA of 61.2x is distorted by the impairment-depressed trailing EBITDA, making the forward earnings multiple the most reliable anchor. Relative to the Consumer Cyclical/Leisure sector, Hasbro's forward PE of 13.75x and PS of 2.47x appear modest, though a precise industry average is not available in the provided data; the PEG ratio of 0.197, however, implies the stock is inexpensive relative to its expected growth rate if that growth materializes. The price-to-book ratio of 21.57x is exceptionally high and reflects the severely depleted equity base following write-downs, which limits the usefulness of book-value-based comparisons. Historically, Hasbro's PE has ranged from roughly 11.6x in Q3 2025 to over 21x in Q1 2025, and its PS ratio has ranged from about 7.1x in Q4 2024 to 12.6x in Q1 2026 on the historical ratios data, though those figures appear to be computed on different share-count or period conventions than the current 2.47x PS. The current forward PE of 13.75x sits near the lower end of the company's recent earnings-based valuation band, which could signal a value opportunity if the earnings recovery holds, or a value trap if leverage and segment leadership uncertainty undermine the rebound. The dividend yield of 3.38% provides a meaningful income cushion and is above the stock's historical yield range of roughly 0.8% to 1.4% shown in the historical ratios, though the negative payout ratio raises questions about sustainability.
PE
-36.0x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 11x~22x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
11.9x
Enterprise Value Multiple
Investment Risk Disclosure
Hasbro faces significant financial and operational risks stemming from its highly leveraged balance sheet and dependence on a single segment. Debt-to-equity of 6.32x and total debt-to-capitalization of 83.5% leave the company vulnerable to rising interest rates or a downturn in cash flow, with interest expense of $46.5 million in Q2 2026 alone. The dividend payout ratio of -1.22x indicates that the current dividend is not covered by trailing earnings, and while free cash flow of $1.21 billion provides some cushion, a sustained earnings miss could force a dividend cut or asset sales. Additionally, the Wizards of the Coast segment now accounts for 58% of revenue and an even larger share of profit, creating concentration risk; the recent departure of its president adds execution uncertainty to the company's most important growth engine.
Market and competitive risks include valuation compression if the earnings recovery stalls, given the stock trades at a forward PE of 13.75x but has a negative trailing PE and a price-to-book of 21.57x. The low beta of 0.466 suggests the stock is less sensitive to market swings, but it also implies it may lag in strong risk-on rallies, as evidenced by underperformance versus SPY over the past six months (-18.04 percentage points). Competitive threats from digital-native gaming companies and changing consumer preferences toward mobile and online gaming could pressure Hasbro's traditional toy and tabletop businesses. Regulatory risks, such as potential tariffs on imported toys or changes to trade policies, could also impact margins, though no specific regulatory headwinds are highlighted in the recent news.
The worst-case scenario would involve a combination of a failed digital strategy, leadership missteps at Wizards, and a macroeconomic downturn that reduces discretionary spending. In this scenario, the stock could retest its 52-week low of $69.50, representing a 22.4% decline from the current price of $89.54. If the earnings recovery reverses and the forward PE compresses to the low end of its historical range (11.6x) on lower EPS estimates, the downside could extend further. The maximum drawdown of -28.39% over the observed period underscores that even low-beta names can experience significant capital impairment during sector rotations or company-specific disappointments.
FAQ
The most severe risk is financial: debt-to-equity of 6.32x and total debt-to-capitalization of 83.5% leave little room for error, and the negative payout ratio of -1.22x raises the possibility of a dividend cut. Second, operational risk is concentrated in Wizards of the Coast, which generates 58% of revenue; the abrupt departure of its president could disrupt growth initiatives. Third, competitive and market risks include potential share loss to digital-native gaming companies and sensitivity to consumer discretionary spending, though the low beta of 0.466 mitigates market volatility. Fourth, valuation risk: the stock trades at a premium price-to-book and could compress if earnings disappoint. These risks are ranked from most to least severe, with leverage being the primary concern.
The 12-month forecast includes three scenarios: a bull case (30% probability) with a target range of $110-$120, driven by successful digital execution and debt reduction; a base case (50% probability) targeting $100-$110, assuming steady growth and stable margins; and a bear case (20% probability) targeting $70-$90, if Wizards growth stalls or leverage becomes problematic. The base case is most likely, hinging on revenue growth of 10-12% and gross margins above 70%. The analyst average target of $109.50 aligns with the base case, implying 22.3% upside. Key catalysts include Q3 earnings, new Wizards leadership, and debt reduction progress.
HAS appears undervalued on a forward earnings basis, with a forward PE of 13.75x, which is below the broader market and near the low end of its historical range of 11.6x to 21x. The PEG ratio of 0.197 suggests the stock is cheap relative to expected growth, and the price-to-sales ratio of 2.47x is modest for a company with a high-margin digital segment. However, the price-to-book ratio of 21.57x is exceptionally high due to impaired equity, and the EV/EBITDA of 61.2x is distorted by trailing impairment charges. The market is pricing in skepticism about the sustainability of the earnings recovery, likely due to leverage and execution risks. If the recovery holds, the stock could re-rate higher; if not, it may remain range-bound.
From a risk/reward perspective, HAS appears attractive for investors with a medium-to-long-term horizon and tolerance for leverage. The stock trades at $89.54, implying 22.3% upside to the analyst average target of $109.50, and the forward PE of 13.75x is low relative to its growth prospects. The digital gaming segment is growing rapidly, with Q2 2026 revenue up 16.2% YoY and gross margins at 76.1%, but the extreme debt-to-equity of 6.32x and the recent Wizards president departure are significant risks. A good buy for those who believe in the digital transformation and can stomach volatility; less suitable for conservative investors due to the negative payout ratio and high leverage.
HAS is better suited for a medium-to-long-term investment horizon of at least 2-3 years, given the ongoing turnaround and the need for the digital strategy to fully materialize. The low beta of 0.466 and 3.38% dividend yield appeal to patient investors, but the high leverage and execution risks make it less ideal for short-term trading. Earnings visibility is improving but still uncertain due to the leadership transition. A minimum holding period of 18-24 months is suggested to allow for debt reduction and Wizards integration. Short-term traders might capitalize on volatility around earnings, but the risk/reward favors a longer view.